{"id":48201,"date":"2018-04-07T04:15:40","date_gmt":"2018-04-07T11:15:40","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=48201"},"modified":"2021-10-10T09:02:44","modified_gmt":"2021-10-10T16:02:44","slug":"black-coffee-7-april-2018","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id48201-black-coffee-7-april-2018.html","title":{"rendered":"Black Coffee: Godzilla vs. The Pizza Monster"},"content":{"rendered":"

\"\"<\/a>It’s time to sit back, relax and enjoy a little joe<\/em> …<\/p>\n

Welcome to another rousing edition of Black Coffee, your off-beat weekly round-up of what’s been going on in the world of money and personal finance.<\/p>\n

And away we go …<\/p>\n

“Gold is an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters, upon an account which is not theirs, upon the virtue of the victims. Watch for the day when it bounces, marked, ‘Account overdrawn.'”<\/em><\/p><\/blockquote>\n

— Francisco’s “Money Speech” from Ayn Rand’s Atlas Shrugged<\/em><\/strong><\/p>\n

“Pizza makes me think that anything is possible.”<\/em><\/p><\/blockquote>\n

— Henry Rollins<\/strong><\/p>\n

“Don’t give me timing. Give me time.”<\/em><\/p><\/blockquote>\n

— Jesse Livermore<\/strong><\/p>\n

Credits and Debits<\/strong><\/p>\n

Debit:<\/strong><\/span> Did you see this? The most recent consumer sentiment survey by the University of Michigan found that young Americans are less optimistic<\/a> than their parents. That’s the first time in the survey’s 60-year history that Americans younger than 35 said they actually have less consumer confidence than those aged 55 and over.<\/p>\n

Debit:<\/strong><\/span> Perhaps younger Americans are pessimistic because they’re simply overreacting to rising gasoline prices. After all, the cost to fill up one’s tank is up across the country, and inching toward the highest pump prices in three years<\/a>. California currently has the highest average pump price in the US at $3.51 per gallon. At the other end of the spectrum, Oklahoma’s motorized prairie schooners are currently paying just $2.37<\/a>.<\/p>\n

Debit:<\/strong><\/span> Then again, maybe millennials are feeling blue because the stock market finished the first quarter of 2018 in the red<\/a>, ending a nine-quarter win streak. (See what I did there?)<\/p>\n

Debit:<\/strong><\/span> That’s bad news for the Swiss National Bank (SNB) because, at the beginning of last quarter, it owned $11,589 worth of American stocks<\/a> for every man, woman and child in Switzerland. That wouldn’t be so alarming if Switzerland’s population was 217, but it’s not — it’s more than 8 million.<\/p>\n

Credit:<\/strong><\/span> So … how absurd is the SNB’s meddling? Well, as Zero Hedge observed: “If the Fed decided to invest $11,589 in the US stock market for every American citizen, they’d need to buy $3.75 trillion of stocks<\/a>; almost doubling their already-inflated balance sheet.” The good news is, when it comes to raising cash, the Fed has never failed. That’s because it only costs 12 cents to print a hundy<\/a>!<\/p>\n

Debit:<\/strong><\/span> By the way, it’s not just the Swiss National Bank<\/a> that is interfering with the markets by propping them up; the Bank of Japan (BoJ) and European Central Bank (ECB) are doing it too. In fact, the BoJ owns 77% of all ETFs (!), while the ECB has been buying Euro corporate bonds, thereby driving yields into the ground. Does anybody else see a problem with this? Anyone? (Aside from me and my tin foil hat brigade.)<\/p>\n

Credit:<\/strong><\/span> As Charles Hugh Smith notes, “The current stocks-and-bonds game is for all the marbles<\/a> (because) the status quo depends on valuations and interest rates remaining near their current levels for the system to function. If rates soar or stocks plummet, the game is over: pension funds collapse, tax revenues drop, debt defaults, and employment craters.”<\/em> Meh. I ain’t gonna worry until I see something like this<\/em><\/strong> outside my window:<\/p>\n